Monetising the demonetisation decision: The Paytm story

The past few weeks have had non-stop coverage of the demonetisation of currency and demonisation of mistry. The jury is still out on both these controversial decisions. Particularly, the demonetisation drive has split public opinion like never before. If I look at my close circle of friends, I've never seen them split to take up two diametrically opposite sides of an issue like this ever before - one camp owning up the decision and actively preaching its benefits, while the other is getting its claws out and sparing no opportunity to go on a full rampage.

This post is not my attempt to step into this minefield. This is an observation from the sidelines on how some people have seized the moment and capitalised on this historic decision.

While its true that this move gave a natural boost to offerings of financial institutions and financial service providers, none had the speed of response and temerity as Paytm. While pretty much everyone was caught unawares on 8th Nov when the decision was announced, a few were able to recover and respond in order to capitalize on the move.

Paytm brought out full-page print ads congratulating the Prime Minister, with a word play on its tagline ‘Ab ATM nahin, #Paytm karo.’ They did not stop there, but followed it up with marketing to keep the buzz on, while also working on the app to simplify usage for new users, and adding features that helped work around the cash crunch.

Not surprisingly, the bold move was met with staunch criticism & they briefly were caught in the political cross-fire. Paytm's Vijay Shekhar Sharma deftly avoided some of these direct volleys and also took swift steps to recover from few of the moves that turned controversial. Like all controversies, these also added to the brand recall and eventually worked in their favour by adding to the kitty.

It was surprising to see neighbourhood stores and roadside vendors accept cash on paytm in barely a couple of days after the decision. While there are plenty of e-wallet players in India, many who have existed for much longer and few with deep pockets like Airtel, Paytm has managed to stay high on recall and captured the imagination of people. 

Consequently, they have emerged a winner in round one. As the moves towards a cashless society get stronger, there is a lot more action to watch out for in this space.